The role of intellectual property in the global economy has grown significantly over the past decades. For many of America's most prominent companies intellectual property value represents more than 70% of the market value of the individual companies. In spite of the economic importance of intellectual property, a true intellectual property-based economy has yet to develop. One factor that has stymied the development of such an economy is the contextual value of the intellectual property. The value of a given intellectual property right will vary as a function of the value perceived by the acquirer of the intellectual property right. For example, in a given transaction type, the value of intellectual property transferred will change as the needs and intended use of the acquirer change. The value of the intellectual property transferred may also change as profit margins achievable through the application of the intellectual property change.
While many attempts have been made to create generic processes for intellectual property transactions none of these attempts answers the contextual value problem. For example, companies have been formed that acquire the intellectual property rights from individual intellectual property rights holders. These companies then license or sell bundles of intellectual property rights to licensees or purchasers. Typically the original intellectual property right holder enters into such a transaction because of a financial need and the value paid to the original intellectual property right holder tends to be minimized. One reason for such a minimization is that the original intellectual property right holder does not have a wide range of access to the intellectual property market. This limited access results in a limited number of buyers for the intellectual property right. Therefore, with a limited number of buyers the intellectual property right never realizes its full and true market value in such a transaction. On the other hand, the company acquiring such individual intellectual property rights typically has a wide range of access to the markets. And so for the company, the value of the intellectual property right tends to be maximized. This wide discrepancy in values for a single intellectual property is due to the different context in which the intellectual property right was transferred.
One consequence of such discrepancies in value is a minimization of incentives to innovate. Smaller companies and independent innovators may find it difficult to balance innovation costs against the value of intellectual property if their market access is constrained.
Therefore, what is needed is a process for transacting intellectual property rights which seeks to maximize the incentives for innovation and which also mitigates the wide range and differences in economic valuation for a single intellectual property right.
What is also needed is a method for aggregating intellectual property rights from a plurality of intellectual property rights holders and providing a value to the intellectual property rights holders that is based on the aggregate value.
What is further needed is a method for valuing intellectual property that mitigates the wide range in economic valuation for intellectual property realized using present methods and adds value to the intellectual property.